ITAT Delhi Mandates Fresh Adjudication for Denied Charitable Registrations Under Section 12A and Section 80G Due to Lack of Fair Hearing

Introduction to the Dispute

In the notable case of Foundation for Computing Education in India Vs CIT (Exemption), the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) addressed a critical procedural flaw concerning the rejection of charitable trust registrations. The core issue revolved around the dismissal of the assessee's applications for formal recognition under Section 12A(i)(ac)(iii) and approval under clause (iii) of first proviso to section 80G(5) of the Income Tax Act 1961.

The Tribunal's ruling highlights the indispensable nature of the principles of natural justice in tax administration, reinforcing that an assessee must be granted an adequate and fair opportunity to present their case before adverse actions are finalized.

Background of the Rejection

The controversy originated from two distinct orders passed by the Commissioner of Income Tax (Exemption), Delhi, both dated 05.01.2026. The CIT(E) had unilaterally rejected the assessee's applications seeking tax-exempt status and donation deduction approvals.